Canada stays off Washington’s latest Section 301 tariff list as Ottawa and Washington head toward a tense July 1 CUSMA review
Canada has dodged Washington’s latest tariff hit list – for now – even as the Trump administration scrambles to rebuild its trade weapons and prepares for a high‑stakes review of CUSMA.
US rebuilds tariff tools after Supreme Court setback
CTV News report that the Trump administration has opened new trade investigations under Section 301 of the Trade Act of 1974 into “excess industrial capacity” and government backing in 16 major trading partners, including China, the European Union, Japan, Mexico, South Korea, Taiwan and Vietnam.
Canada is not on that list.
US Trade Representative Jamieson Greer said the investigation will look at persistent trade surpluses, subsidies and suppression of workers’ wages that could give foreign companies an unfair advantage over US firms.
Greer said, “The policy remains the same — the tools may change depending on, you know, the vagaries of courts and other things,” and stressed the goal is to protect American jobs.
In a news release, Greer said the United States “will no longer sacrifice its industrial base to other countries.”
He framed the Section 301 probes as part of US President Donald Trump’s effort to reshore supply chains and create “good‑paying jobs for American workers,” CTV News reports.
CBC News reports that these investigations could lead to new tariffs by this summer, and that they follow a Supreme Court ruling which tore down the centrepiece of Trump’s earlier tariff strategy by rejecting his use of an emergency‑powers law.
The court found the US Constitution “very clearly” gives Congress power over taxes and tariffs.
Interim tariffs and tight timelines
CTV News report that, after the ruling, Trump imposed 10 percent tariffs on foreign‑made goods under Section 122 of the 1974 Trade Act, citing a balance‑of‑payments emergency.
Those tariffs can rise only to 15 percent and expire after 150 days on July 24 unless Congress extends them, which CTV News describes as unlikely.
Trump has said he plans to raise the rate to 15 percent but has not done so yet.
Greer said the administration is “keying off” the 150‑day deadline and wants to bring “potential options” to Trump as soon as possible.
The administration has also imposed Section 232 tariffs on specific industries such as steel, aluminium, automobiles, and cabinetry.
The Commerce Department continues separate Section 232 investigations alongside the new 301 actions.
Canada’s position and exposure
Canada was not included in the countries targeted by the new Section 301 investigations.
The White House and Greer’s office have not answered questions about Canada’s exclusion or whether it could be included later.
CTV News reports that Scott Lincicome of the Cato Institute said a 301 probe would struggle to justify tariffs on Canada because of “the nature of Canada’s goods balance with the US (oil or not),” which may not show the surplus or “overcapacity” Washington needs to defend new tariffs.
Canada’s trade surplus with the US is largely driven by US imports of Canadian oil.
Statistics Canada data cited by CTV News show a $5.4bn Canadian merchandise trade surplus with the US in January, down from $5.7bn in December, with exports to the US down 3.8 percent and imports down 3.4 percent.
The 10 percent worldwide Section 122 tariff does not apply to goods compliant with the Canada‑US‑Mexico Agreement (CUSMA), which has shielded Canada and Mexico from some of the worst impacts of US tariffs.
US$166bn in tariff refunds and ongoing challenges
Reuters reports that US Customs and Border Protection (CBP) is building a four‑part system to refund US$166bn in illegal tariff collections with interest, after most US tariffs were struck down by the Supreme Court in February.
CBP official Brandon Lord said in a court filing that the agency is developing an online portal for importers and brokers to submit claims, which will go through processing, review and refunding, and that the system could operate as soon as mid‑April.
Lord said the review portion of the system is about 80 percent complete and the mass‑processing portion is about 40 percent complete.
More than 330,000 importers paid tariffs on 53 million shipments, but only around 21,000 were registered to receive refunds as of last week.
Refunds will go only to importers that paid the tariffs, Reuters notes.
FedEx and Costco have been sued by customers for refunds. FedEx has said it will reimburse customers, while Costco has said it will use the refunds to lower prices.
After the Supreme Court struck down the earlier tariffs, Trump ordered new 10 percent tariffs under a decades‑old authority, and that states and private businesses have sued to challenge those tariffs as well.
In addition, the administration has started investigating unfair trade practices of major trading partners as a step toward imposing tariffs under a law that has withstood legal challenges.
CUSMA review and signals from Washington and Mexico
BNN Bloomberg report that US Ambassador to Canada Pete Hoekstra said Washington wants to renew CUSMA but faces resistance from Canada as a mandatory July 1 review approaches.
He said there have been no “substantive” talks with Canada since October, although Canadian Trade Minister Dominic LeBlanc met US Trade Representative Jamieson Greer last week.
Hoekstra said Canada should do everything it can “to get into the lowest tariff buckets” and that the US is looking for coalitions of countries to ensure non‑tariff barriers are removed when trade agreements exist, Reuters reports.
He said Trump has stated there will be “some tariff” for access to the US market and that Canadian governments and businesses should make the case for why it is beneficial for the US to trade with Canada at the lowest tariff rate.
Reuters reports that Hoekstra pushed for deeper Canada‑US collaboration on energy and critical minerals, noting that the US already buys significant volumes of Canadian oil and natural gas and wants to deepen that relationship.
He said Canada should stockpile critical minerals in Canada or the US and develop a full supply chain so it can be an “ideal partner” for Washington.
Minister LeBlanc’s office said Canada remains committed to a new economic and security relationship with the United States that benefits workers and businesses on both sides of the border.
It added that he looks forward to further engagement with his US and Mexican counterparts during the trilateral and bilateral CUSMA review.
CityNews reports that Mexico’s vice‑minister of trade, Luis Rosendo Gutierrez Romano, said Canada plays a fundamental role in the trade agreement and that Mexico is optimistic the review will lead to a stronger, more efficient pact and a “very strong, trilateral relationship.”
The CUSMA review this year forces each country to choose between renewing the deal for 16 years, withdrawing, or signalling non‑renewal while staying in the pact, which would trigger annual reviews for up to a decade.
